Monday, January 17, 2011

Auctions in Overbooked Seats

Delta will start collecting bids for overbooked flights earlier so as to better operate the auction for these seats. Airlines already "auction" these seats at the gate by offering cash or coupons for later flights. Now though, when you check into an overbooked flight, at the airport or online, you will be prompted for a bid amount. By starting earlier, they can attract more bidders. And by starting before the transactions cost of going to the airport have been sunk, they can expect lower bids.

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